March 17, 2025
Market Divergence Reveals a Shift in Sentiment
Dear Subscriber,
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| By Marija Matic |
The crypto market continues to face a sustained period of capital flight.
According to the latest CoinShares report, digital asset investment products experienced a fifth week of outflows.
It reveals institutional crypto outflows reached $1.687 billion last week, with the U.S. accounting for approximately 93% of Bitcoin (BTC, “A”) withdrawal.
Meanwhile, Germany and Brazil bucked the trend with modest inflows, highlighting regional differences in investor sentiment.
This marks an unprecedented 17 consecutive days of outflows. That is the longest uninterrupted withdrawal period since 2015, with cumulative losses now totaling $6.4 billion.
This downtrend persists amid bearish sentiment, with BTC remaining below the $90,000 threshold.
However, despite this prolonged downturn, year-to-date inflows remain positive at $912 million. Additionally, reduction in short-Bitcoin positions last week suggests diminishing bearish sentiment toward the leading cryptocurrency.
Indeed, as Juan Villaverde wrote on Friday, “It is precisely at times like this — when most worry and many panic — that prices finally set a low. Like a pendulum at the furthest extent of its arc, whenever the selling is exhausted, prices have nowhere to go but higher.”
And indeed, select coins have begun to show promising signs of recovery.
XRP (XRP, “B-”) stands as a notable exception to the general decline. It attracted an additional $1.8 million in institutional investment over the past week. This positive momentum likely stems from optimism surrounding the potential conclusion of its protracted legal battle with the SEC and speculation that XRP might be reclassified as a commodity.
While institutional confidence in the crypto sector appears subdued overall, these pockets of resilience indicate that investor interest persists beneath the surface.
Importantly, the institutional picture doesn't necessarily reflect retail market sentiment, where certain cryptocurrencies outside institutional offerings demonstrate significantly different performance patterns.
Retail’s Favorite Cryptos
The price performance of PancakeSwap (CAKE, Not Yet Rated) and Toncoin (TON, “C+”) stand out among the top 100 cryptocurrencies. Both posted impressive gains over the past seven days.
PancakeSwap's CAKE token, for example, surged over 60% in that time!
As the largest decentralized exchange on BNB Chain, PancakeSwap distinguishes itself — alongside Solana’s (SOL, “B”) Orca DEX and Sui’s (SUI, “B-”) Cetus — by maintaining the strongest fee/Mcap ratio among the top 20 DEXes.
This ratio, which measures protocol revenue against market capitalization, indicates how efficiently a protocol generates value relative to its valuation.
Another impressive metric stems from increased trading activity on PancakeSwap, which recently propelled it to the No. 1 position in 24-hour volume, temporarily surpassing even Uniswap (UNI, “C”), the leading DEX on the Ethereum (ETH, “B+”).
This reflects the exceptional growth PancakeSwap demonstrated throughout 2024. It hit a record $310 billion in total trading volume — a 179% increase from 2023.
This expansion was fueled by PancakeSwap’s integration with networks like Arbitrum (ARB, “B-”) and Base, alongside user-friendly innovations that enable token launches without coding expertise.
And the latest bout of momentum aligns with two significant developments:
- Binance's recent $2 billion investment from Abu Dhabi's MGX, which has revitalized confidence in Binance-ecosystem projects, and
- Renewed memecoin interest that has begun to drive higher transaction volumes.
TON's surge, meanwhile, was catalyzed by positive developments regarding Telegram's founder and CEO, Pavel Durov.
On Saturday, French authorities returned Durov's passport and lifted his travel ban, allowing him to return to Dubai, where Telegram is headquartered.
For context, Durov was detained in France last August, with authorities alleging he failed to assist in combating criminal activity on Telegram by refusing to provide information about users. Though released days later, he was required to remain in France until this recent development.
As a result of this positive news, the open interest on Toncoin has surged 67% in just two days, indicating dramatically increased derivatives trading activity.
Selective Recovery: Project-Specific Momentum Emerging
These isolated movements signal an important shift in market dynamics.
After weeks of near complete stagnation and declining volumes across the crypto sector, the first signs of selective revitalization have begun to peek through.
This pattern is characteristic of transitional market phases:Select projects with strong fundamentals or catalytic developments break free from the consolidation pattern … even while the broader crypto market continues to trade sideways or even downward.
The selective nature of these rallies suggests investors are becoming more discerning. Many are choosing to focus on projects with tangible developments rather than speculating broadly.
In the coming weeks, I expect to see more of these isolated pockets of strength as capital selectively returns to projects with compelling narratives or improving metrics.
This targeted activity often precedes wider market movements, as successful projects begin to attract attention … and eventually spark broader momentum.
The crypto tides are starting to turn. Savvy investors should see these as indicators to prepare for the next leg up.
Best,
Marija Matić
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